Head-To-Head Review: Orrstown Financial Services (ORRF) versus Fulton Financial Corporation (FULT)

Orrstown Financial Services (NASDAQ: ORRF) and Fulton Financial Corporation (NASDAQ:FULT) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, profitability, valuation, institutional ownership, analyst recommendations, risk and dividends.

Insider and Institutional Ownership

38.0% of Orrstown Financial Services shares are held by institutional investors. Comparatively, 63.0% of Fulton Financial Corporation shares are held by institutional investors. 5.4% of Orrstown Financial Services shares are held by company insiders. Comparatively, 0.7% of Fulton Financial Corporation shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Orrstown Financial Services and Fulton Financial Corporation’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Orrstown Financial Services $58.69 million 3.45 $8.84 million $1.06 22.92
Fulton Financial Corporation $713.65 million 4.36 $173.19 million $0.99 17.98

Fulton Financial Corporation has higher revenue and earnings than Orrstown Financial Services. Fulton Financial Corporation is trading at a lower price-to-earnings ratio than Orrstown Financial Services, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current recommendations and price targets for Orrstown Financial Services and Fulton Financial Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Orrstown Financial Services 0 1 1 0 2.50
Fulton Financial Corporation 1 5 0 0 1.83

Orrstown Financial Services currently has a consensus price target of $28.00, indicating a potential upside of 15.23%. Fulton Financial Corporation has a consensus price target of $18.00, indicating a potential upside of 1.12%. Given Orrstown Financial Services’ stronger consensus rating and higher probable upside, equities analysts clearly believe Orrstown Financial Services is more favorable than Fulton Financial Corporation.

Profitability

This table compares Orrstown Financial Services and Fulton Financial Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Orrstown Financial Services 13.25% 6.25% 0.61%
Fulton Financial Corporation 20.86% 8.02% 0.90%

Dividends

Orrstown Financial Services pays an annual dividend of $0.40 per share and has a dividend yield of 1.6%. Fulton Financial Corporation pays an annual dividend of $0.44 per share and has a dividend yield of 2.5%. Orrstown Financial Services pays out 37.7% of its earnings in the form of a dividend. Fulton Financial Corporation pays out 44.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Risk and Volatility

Orrstown Financial Services has a beta of 0.89, indicating that its share price is 11% less volatile than the S&P 500. Comparatively, Fulton Financial Corporation has a beta of 1.16, indicating that its share price is 16% more volatile than the S&P 500.

Summary

Fulton Financial Corporation beats Orrstown Financial Services on 9 of the 16 factors compared between the two stocks.

Orrstown Financial Services Company Profile

Orrstown Financial Services, Inc. is the bank holding company for Orrstown Bank (the Bank). The Bank is engaged in commercial banking and trust business. The Company operates through Community Banking segment. The Bank’s activities involve accepting demand, time and savings deposits, and granting loans. The Bank grants commercial, residential, consumer and agribusiness loans in its market areas of Cumberland, Franklin, Lancaster and Perry Counties in Pennsylvania and in Washington County, Maryland. The Company’s securities available for sale include debt and equity instruments. Through its trust department, the Bank renders services as trustee, executor, administrator, managing agent, custodian, investment advisor and other fiduciary activities authorized by law under the trade name, Orrstown Financial Advisors (OFA). OFA offers retail brokerage services through a third-party broker or dealer arrangement with Cetera Advisor Networks LLC.

Fulton Financial Corporation Company Profile

Fulton Financial Corporation is a financial holding company. The Company is the bank holding company of Fulton Bank N.A. (the Bank). As of December 31, 2016, the Company’s six subsidiary banks were located primarily in suburban or semi-rural geographic markets throughout a five-state region (Pennsylvania, Delaware, Maryland, New Jersey and Virginia). Each of the Company’s subsidiary banks offers a range of consumer and commercial banking products and services in its local market area. Personal banking services include various checking account and savings deposit products, certificates of deposit and individual retirement accounts. The subsidiary banks offer a range of consumer lending products to creditworthy customers in their market areas. Commercial banking services are provided to small and medium sized businesses. It also offers investment management, trust, brokerage, insurance and investment advisory services to consumer and commercial banking customers in its market areas.

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